Our group has continued studies of chromatin structure and the regulation of eukaryotic gene expression. We have made significant progress towards understanding the mechanism of ATP-dependent chromatin remodeling by Drosophila NURF (Nucleosome Remodeling Factor). To elucidate the biological significance of NURF-induced nucleosome sliding, we have isolated mutations for Drosophila nurf301. We confirm that NURF is required for transcription activation in vivo. In nurf301 mutants, heat-shock transcription factor binding to and transcription of the hsp70 and hsp26 genes are impaired. Additionally, NURF is required for homeotic gene expression. Consistent with this, nurf301 mutants recapitulate phenotypes of Enhancer of bithorax, a positive regulator of the Bithorax-Complex previously localized to the same genetic interval. Finally, mutants in NURF subunits exhibit neoplastic transformation of larval blood cells that induces melanotic tumor formation. These results reveal that NURF is required not only for proper regulation of genes involved in the stress response and development, but also for tumor suppression. We are also making excellent progress on studies of INO80, a member of the SWI2/SNF2 superfamily. We have completed identification of all subunits by mass spectrometry, and are conducting genetic and biochemical experiments to elucidate the mechanism and physiological functions of the complex. The INO80 complex contains stoichiometric amounts of actin and three actin related proteins (Arp4, Arp5, and Arp8). Arp4 and actin are essential for cell survival, but the viability of null mutants for Arp5 and Arp8 allowed us to further investigate their functional roles. We uncovered functions of Arp5 and Arp8 in chromatin remodeling by biochemical analysis of the null mutants. Purification of INO80 complexes from arp5D and arp8D cells showed that the mutant complexes are compromised for DNA binding, nucleosome mobilization, and Ino80 ATPase activity. Consistent with the biochemical findings, arp5D and arp8D mutants show phenotypes similar to ino80D. These results provide new insights on the role of actin and Arps in the cell nucleus. longstanding reports of actin in the cell nucleus.